The European Summit focused on the future of Europe with its Europe 2020 strategy. It is the follow-up to the Lisbon strategy passed in 2000, which declared that Europe was “to become the most dynamic competitive knowledge-based economy in the world by 2010”.

The new Europe 2020 strategy is almost identical in terms of substance. Sustainable - or as it is now called “intelligent” - growth, an emphasis on education, knowledge and research, as well as qualifications and employment and finally the environment are the core of the old and new strategy.

Now that the year 2010 has come, it is plain to see for everyone that the Lisbon 2010 strategy did not deliver the results it promised. The target of 3% of GDP of R&D expenditure increased from 1.82% to 1.9% between 2000 and 2008. This is dismal, given the goal of becoming the world’s most competitive economy. More fatally, most European citizens associate whatever improvements have been achieved – such as in employment – not with the EU Lisbon strategy. This is a not a good outcome for Europe, and we cannot afford another 10 years like that.

Why did it not work? The Lisbon strategy was flawed for two simple reasons. First, there were too many objectives. This was partially rectified in the revamp of 2005, albeit too late. The second flaw was to define Europe’s strategy in terms of surpassing other countries. This view of competitiveness is misguided. Countries do not necessarily raise their living standard by passing others. Companies or football clubs do. In fact, European citizens typically benefit if other countries grow. In an interdependent world, this zero-sum view was unfortunate.

But the real reason why the Lisbon strategy had no bite was its lack of credible governance and as a result its lax implementation. The success of the Europe 2020 strategy will be decided by its implementation, which is why Europe needs better governance, hard targets and sanction mechanisms. To be sure, subsidiarity and the need to avoid misspending at EU level continue to be important aspects of making Europe more credible. Yet, the future of sustainable growth in Europe will be significantly decided by effective policy coordination, both in Europe and globally: exit strategies, global imbalances, distortion of competition, climate change, and so on. It is hard to think of an economic or social problem that will not be decisively affected by international developments. Companies are global too, and this trend is likely to continue.

To address those issues in the interest of European citizens, we need not only more European coordination, but also more sovereignty for EU institutions under the new Lisbon Treaty. This must include clear targets and a mechanism to sanction misbehavior. It is no surprise that in those policy areas where sanctions are credible - such as in competition policy, including state aid control, or the stability pact – Europe works noticeably well.

Bilateral initiatives are welcome, but they do not replace the need for a European strategy. The German and French Government at the bilateral meeting on February 4 agreed on wide-ranging economic and social cooperation. They also ask their respective Council of Economic Advisors to report jointly on sustainable economic growth. Given the international dimension of growth, a European Council of Economic Advisors may be better placed to address the issue.

In sum, a European economic and social strategy for 2020 is badly needed for two reasons: coordination and representation. José Manuel Barroso is right when he says that Europe must act together or be ignored. However, much of its success will depend on the implementation. We can not afford another unsuccessful European economic and social strategy. Especially in the post-crisis new world order.